1. Marketing budgets cut for first time in seven years

UK companies cut their marketing budgets during the third quarter, the first time there has been a decrease in seven years, amid heightened political and economic uncertainty.

The IPA’s quarterly Bellwether report shows a net balance of 0.5% of marketers questioned revised their marketing budget down in the third quarter. Nearly two-thirds (64.1%) reported no change in budget, reflecting a ‘wait-and-see’ approach adopted by many in the face of uncertainty about Brexit and its impact on business.

Companies were also worried about low consumer confidence, causing them to hold back on spending, particularly for big-ticket marketing drives. Overall, 18.2% of firms cut ad spend, while 17.7% reported budget growth.

Only digital marketing reported an increase in budgets, with a net balance of 11.1% of firms reporting growth boosted by new online tools, data and a push towards social media.

Main media advertising saw budgets put on hold following strong growth of 5.2% and 5.6%, respectively, in the first two quarters of the year. The remaining types of marketing all saw contractions, including PR (-4.7%), sales promotions (-2.3%), direct marketing (-7%) and market research, down by a huge 16.9%.

Source: IPA

2. UK digital advertising spend increases to £7.3bn

Total UK digital ad spend was up 13% year on year to £7.3bn in the first six months of 2019.

The analysis shows that video display and search were the biggest drivers of growth between January and June 2019 – up 27% and 13% respectively.

Search accounted for £3.7bn of the total digital ad spend in the first half, while combined display (video and non-video) is worth £2.8bn, a 17% annual uplift.

Non-video remains the largest display format, up 8% year on year to £1.45bn, but video formats are growing fast, rising 27% to £1.32bn.

Classified spend was down 1% to £720m, while ‘other’ spend was flat at £41m.

Source: IAB UK

3. Amazon eats away at Google’s search market share

Amazon is slowly eating away at Google’s search market share in the US, with the ecommerce giant expected to generate $7bn in search ads this year.

That would give Amazon a 13% share of the search market, still well behind Google’s 73% share and $40bn in revenue. However, by 2021, Amazon’s share is expected to increase to 16%, while Google’s share will drop to 70%.

Overall, the US search ad market will increase by 18% year on year in 2019. Microsoft is expected to take 6.5% of the market, followed by Verizon Media on 2% and Yelp on 1.8%.

Source: eMarketer

4. Grocery sales growth slows as autumn weather kicks in

Grocery sales growth slowed in September, up just 1.7% in the four weeks to the 5 October and marking the slowest September growth in two years.

While sales of soft drinks (2.7%), crisps and snacks (2.3%) and frozen food (1.2%) were up, general merchandise sales fell by 4.7%, suggesting a weakness in discretionary non-food spend.

Tesco and Sainsbury’s sales over the 12 weeks to 5 October were broadly flat, while Asda and Morrisons saw a slight decline. Sales growth at Aldi and Lidl slowed but were still faster than the ‘big four’.

The figures suggest supermarkets may increase in advertising and promotion efforts as they head into the Christmas shopping quarter. Ad spend by the supermarkets fell 1% in the first eight months of the year, although Aldi, the top spender, increased its investment by 9% to £25.7m and Sainsbury’s doubled its spend to £11m to promote its 150th anniversary year.

Source: Nielsen

5. Lack of data skills holding brands back

More than a quarter (27%) of UK business leaders believe a lack of data skills is impacting their ability to deliver the best customer experience.

The survey of 750 business leaders found that 22% feel CX is held back by the lack of a data-centric culture, while 24% identified the lack of a unified tech platform as the biggest obstacle.

The figures come despite the fact that gaining real-time customer intelligence is business leaders’ top strategic priority, cited by 46% of those questioned. Improving customer segmentation and targeting was second on 40%.